What is the Voluntary Carbon Market?
The voluntary market is experiencing a credibility crisis that demands new standards of integrity and transparency. The regulation of the Brazilian Emissions Trading System (SBCE) creates opportunities for convergence between the regulated and voluntary markets, strengthening the traceability of credits and compatibility with Article 6 of the Paris Agreement, which will allow Brazil to trade emission reductions internationally.
Why does it matter for your company?
Business engagement in the voluntary carbon market is a strategic element for the transition to a low-carbon economy. The use of high-integrity carbon credits allows companies to complement their decarbonization efforts, offsetting residual emissions that cannot be eliminated immediately.
Furthermore, investing in credits derived from Nature-Based Solutions adds value that goes beyond carbon, promoting ecosystem conservation, soil regeneration, biodiversity protection, and the strengthening of local communities and indigenous peoples. These co-benefits reinforce corporate reputation, expand the social license to operate, and strengthen the company's position with consumers and investors.
With the approval of Law No. 15,042, of December 11, 2024, which establishes the Brazilian Emissions Trading System (SBCE), it is essential to harmonize the regulated and voluntary markets, adopting international integrity standards and strengthening Brazil's reputation as a reliable supplier of carbon credits;
WHAT DOES CEBDS THINK ABOUT THIS?
CEBDS views the voluntary market and the future SBCE as complementary mechanisms. In 2024, we published the Buyer's Guide to Natural Climate Solutions., In partnership with the WBCSD, this initiative aims to guide companies on quality and integrity criteria when purchasing carbon credits, highlighting the importance of transparency, due diligence, and public communication about how these credits are used, in accordance with the guidelines of the Voluntary Carbon Markets Integrity Initiative (VCMI).
According to CEBDS, Brazil has the potential to lead the global market for natural carbon credits, provided that its systems are robust, inclusive, and transparent, in which the carbon market contributes not only to reducing emissions but also to sustainable development, valuing natural capital, and generating concrete benefits for local communities.
The Market we want
It is essential that the project offer is sufficiently validated and verified and that its environmental integrity is ensured, thus guaranteeing its additionality and the adequacy of its baseline, as well as the permanence of the activity and prevention of leakage to other locations.
In order for companies to better navigate opportunities to use and generate carbon credits in the voluntary market, it is important to have legal certainty regarding ownership, legal nature, taxation and other aspects related to the legality of activities, as well as use and commercialization. of carbon credits.
It is important that the offer of carbon projects observes robust environmental and social safeguards for communities and parties involved and impacted, including through the due consultation process to obtain free, prior and informed consent, as well as fair sharing of benefits and partnership with the communities involved.
It is important that there is broad transparency and access to information regarding projects, as well as regarding the circulation, use and retirement of carbon credits, ensuring the traceability and reliability of the system.
It is important that there is coordination with other climate policy instruments in Brazil, mainly the Brazilian Emissions Trading System, to guarantee the liquidity of carbon credits in the voluntary market and legal security in relation to supply and demand, ensuring coexistence between two markets in a harmonious way in the evolution of climate policies and emissions pricing in Brazil.